3 entries from July 2015

July 22, 2015

Pricing is the least understood facet of any business, but it’s one that can easily be fixed — without a negative impact. Most of the artists I know are underselling their art, struggling, having to paint too many paintings to keep their heads above water. They are on an exhausting treadmill because their prices are too low.

How would your life change if your prices were higher? If your immediate reaction is that you would sell less work, we need to work on your pricing strategy.

Most people in business get into business because they want to provide a good, quality service at a good price. They want to offer what they would want. Yet the number one reason for business failure is that profit margins are too low because of low prices.

Of course, low prices are necessary in some businesses because that’s their business model. Think Walmart. Yet the perception of Walmart’s prices and the reality are often two different things. Some companies promote low prices on high-volume items to get people into stores, yet other items may not be priced than you can find them elsewhere.

But as an artist, you’re not in the commodity business where, you produce lots of low-cost items. What you produce is a single, unique, handmade item by a well trained craftsperson — you. But do you think of yourself that way?

I can buy a chair for $20. I can buy a chair for $200. Or I can go into a craft gallery and buy a beautiful hand-crafted wooden chair for $1,500, knowing it's one of a kind. That chair won’t be for the person who buys chairs at Walmart, but there is a market, and there is a special person who will buy it.

You Are Not Your Customer

One of the hardest things to overcome for anyone in business, including artists, is understanding your market and understanding that you are not your market. An artist once said to me, “I want to sell my paintings cheap so that people like me can afford to own them.” Though that's admirable, people like him are not likely to want to own them. A painting is a luxury item, and the people who treat themselves to luxury items are not the average Joe. When I asked this painter how his sales were going, he told me they weren’t going well. He couldn’t understand it, because, as he said, “My prices are much lower than everyone else's.”

Let's look for a moment at the typical art gallery visitor. Perhaps it’s a couple, and both are lawyers making a half million a year. Instead of owning a Jaguar and a Lexus, they could afford to own four or five Kias. Why don’t they buy them and save their money? That takes us to tip #2.

Tip #2: Price is a signal of perceived quality.

In my art marketing seminar, a man told the story of being at an art show. A woman asked, “How much is this painting?” He responded that it was $4,000, and she said she would “take it." She handed him a check for $40,000. When he told her she had made a mistake and added an extra zero, she ripped up the check and said, “I don’t want it, then. It can’t be very good if it’s only $4,000.”

Tip #3: Certain people always want the best.

There is always an element of society who perceive themselves as needing the very best, and if it’s not the best — often signaled by the price — they won’t buy it. They don’t need bargains.

One of my mentors, Dan Kennedy, says that rich people have quirks. They will be cheap in one area and extravagant in others. For instance, he paid a million dollars to own a classic collectable car that had been owned by his favorite celebrity. He had no price resistance when told how much it cost — he didn't even negotiate. He simply wrote a check. Yet he also said, “When I buy shirts, I hate the idea of paying more than $30, so I always buy my shirts at Walmart.”

So how do you get your prices up?

I have two theories.

Tip #4: Build a luxury image and brand, and reinforce it constantly with everything you do.

First, luxury selling is all about perception. A Louis Vuitton bag is not a purse, it’s a handbag. A large coffee at Starbucks is a venti, and it’s not served by a clerk, but a barista. These and other companies focus on selling image. My favorite Louis Vuitton ad (at the top of this blog post) doesn’t mention the company name. It’s all image. People buy image, and people want to reinforce self-image. People want others to see what they own. That’s why, when I visit some collectors, they’ll say, “Do you want to see my Mundy? Or my Schmid?” or their “Warhol or Hockney” or their “Sergeant or Zorn.”

Building your brand matters. Giving meaning to your name, ensuring your paintings are perceived as the best, is a critically important process. People will pay more for it.

Even in the lower price ranges, the person who buys a $1,500 painting is just as likely to buy a $3,000 painting. So if you’re in a gallery, giving up half your profit means doing without either $750 or $1,500. Which is better?

Let’s do the math.

Let’s say you sell 10 paintings a year at $1,500 each. Your total sales are $15,000, and your profit is $7,500.

Now, let’s say you raise your price to $3,000 and you lose 20% of your buyers, so you sell only eight paintings a year. Your total sales are $24,000 and your profit is $12,000. Which is better?

Let’s take it further. Raise your price to $4,000 and lose 30% of your buyers. Now you sell seven paintings a year, for a total of $28,000 and $14,000 in profit. You made double the profit of selling at the $1,500 price and you only had to paint seven paintings instead of 10.

The snowball effect also kicks in. First, your paintings get better because you can spend more time on them. Second, the gallery is making more money on you, so they push your paintings more. Third, because your prices are higher, you are perceived by the buyer as more valuable. Fourth, by painting less, you create scarcity, which actually boosts sales and prices. “Jane only paints seven paintings a year. You can own one of the seven” is a powerful statement, the kind galleries love to make.

Have Some Guts

I had dinner this year with a very famous artist who produces about four paintings a year and makes close to a quarter million a year from them. I asked how he got his prices up, and he told me that he had no idea what he should be charging for his paintings, so he just picked a number out of the air. He sold his first painting for $40,000 because he didn't know he couldn’t. It only went up from there.

Most price resistance is in your head because you can't afford to spend a lot of money on a painting. Your customer can. I have readers of Fine Art Connoisseur who don’t think twice about dropping 100 grand on a painting.

Tip #5: Go for it. Raise your prices. Be bold.

The way to get your prices up is to have some guts. And if you’re not raising your prices every year, you’re losing money because of inflation. Have you noticed how much more groceries cost?

Some galleries will give you resistance, and it's the kiss of death if you have low prices at one gallery and high prices at another. So you have to notify your gallery of your universal price increase. If the gallery does not support you or believe they can get that price, it's time to leave and find someone who thinks your new price is perfect. People cannot sell what they don’t believe in. Find believers.

Lipstick on a Pig?

I’ll end with a story a dealer once told me. He said he had a beautiful painting that sat in the gallery for a year, priced at $1,400. He could not understand why it was not selling, so he took it off the wall, put a $1,500 frame on it and raised the price to $14,000. It sold within a week. Same painting. Was it the frame or the price? I suspect it was both.

A painting in a cheap frame won’t be perceived as being worth much, but an elegant frame sends a signal. Who would you rather do business with? A financial adviser who drives up in a Hyundai, or one who drives up in a Bentley? It probably depends on your value system, but I’d pick the adviser who appears more successful. For people who use their cars in business, cars are like picture frames. If I’m selling a $10 million house, I want the agent in the most expensive car.

Price also impacted that sale. A painting is better if it’s more expensive — that is the perception of luxury buyers. The combination of great frame and great price cemented that deal.

Tip #6: Framing sends a signal to support your prices. Expensive frames allow you to increase even more.

In summary: You will lose some customers at a higher price, but you’ll make more money and work less. Build the importance of your brand with constant repetition over years and a luxury appearance. (A great trick is to put your high price in your ads, which instantly packages you as a more expensive artist. Again, this takes guts.)

I believe most artists could double their prices and not lose any customers. Your prices will rise. But it all starts with your understanding of pricing — and having the guts to do it.

July 17, 2015

A wise mentor once told me that “whenever someone declares something as dead, its probably a great time to embrace it.”

Experts long ago predicted the death of direct mail. These days when social media is so cheap, email so cheap. Why bother doing direct mail?

Simply because it works.

In fact at a direct marketing conference recently the experts were saying “it works better than it ever did because there is no one doing it anymore.”

As I have mentioned in the past, a smart marketer never has all their eggs in one basket. Things change. Things can go wrong. Once long ago I had a business which relied on email to sell a product, when suddenly there was an email problem, which took months to solve. Sales stopped. Had I had other sources of marketing going it would have not only prevented the loss of sales, it would have been working for me as well.

As an artist Direct mail to your “customer list” is a great tool. Printed oversized postcards with images of your artwork are terrific tools to announce new artworks. You can keep the front beautiful and unencumbered and place a selling message on the flip side.

A Great Direct Mail Trick

I once launched a direct mail campaign. My goal was to cement four ideas in the minds of my target customer, who were potential advertisers of my radio magazine. So I made up four postcards, one for each point. I mailed one postcard a week with a different message each week. But every 4th week they got the same post card again. I repeated this campaign knowing that they would receive each post card five times.

Not only did we receive no complaints, we noticed an uptick in our business related to those messages the more times those cards hit. Repetition works.

Direct mail experts will tell you to do a mailing, then repeat the exact mailing to the same list a week or two later. It improves results the second time and again the third time. It’s been tested.

In media there is a tendency to declare things as dead or outdated and be seduced by the new. Though there is nothing wrong with the new, my goal is to get my product sold or my message sold, so I’ll employ lots of different media alternatives to get that done. Today I get almost no direct mail from artists or galleries, but I do get a couple and they stand out, and I tend to read them or keep them if the images are nice. Its an open opportunity you should consider.

July 13, 2015

Want to Make Some Christmas Sales This Month? This story gives you a step by step plan.

Santa on water skis? Yes, I admit to doing it. In the 1980s, I owned a radio station. I had just taken it over and needed to bring lots of attention to it. So I invented the “Summer Santa” promotion. I had learned that our news director played Santa at Christmas time to make a couple extra bucks. He already had a suit. He already had a belly full of jelly, a jovial laugh, and a Christmas-like spirit. It was an instant promotion, and it was easy. Spot the “Summer Santa,” recite a phrase about the station, and win a Christmas gift in July. We took “Santa” everywhere, including the lake where everyone was spending time on July 4th. And yes, he did actually water ski in the Santa suit. I know because I drove the boat. Have you ever seen a wet Santa? It’s quite a sight.

Eric, Are You Suggesting I Do a Christmas in July Promotion?

No, not exactly, though there are some elements you can employ to get attention.

Money Does Grow on TreesInstead we’re going to do something really Christmas-like together. Money does grow on trees, and we’re going to plant a money-making Christmas tree in July. Are you in?

Everything in marketing starts with a seed. Plant a seed, nurture and water it, expose it to sunlight, watch it grow and blossom, and it grows money.

Getting Early Attention from Christmas ShoppersWhat does everyone do around Christmas time? They sell like crazy, they promote like crazy, and it is darned near impossible to get anyone’s attention at Christmas to sell something. So we’re going to get them thinking about a Christmas gift in July, when they're not thinking about Christmas.

Now I’m presuming that you’ve already got a list of previous buyers. If you don’t, this won’t work.

A Step By Step Plan You Can Do This Week To Stimulate BusinessHere is the move. Ready?

You write a Christmas letter. You can make up your own, or you can copy mine. You mail it out to your list and wait for the magic to happen.

Oh, and the critical thing is that you send it to the spouse or partner of your buyer. For instance, if the one was the one who loved and bought the painting, send the letter to the other. If they both bought the painting, send it to one of them. Note, I did not say e-mail this. I want you to use mail. E-mail is too easy to delete.

Step 1. Get a red mailing envelope. Put your name in the return address area. Put these words on one side of the envelope: My First Annual July Christmas Letter. Open immediately.

Step 2. Enclose a candy cane. It makes the envelope lumpy and creates curiosity. You may want to wrap the packaged candy cane in some foam or paper. People cannot opening resist a lumpy envelope.

Step 3. Get some Christmas letterhead. You can usually find it at a craft store like Michaels, or at an office supply store like Staples or Office Depot. It’s stationery with a Christmas theme.

Step 4. Write the letter (copy to follow). Make sure to have a strong headline. Sign the letter.

Step 5. Easy to Find Contact Information. Make sure you have put your mobile phone number and e-mail on the letter so they can find you.

Step 6. Enclose a photo of a recent painting you’ve done. Place information on the back: “Thought you’d like to see one of my recent paintings. This one is called NAME and might look great hanging in your home.” With your contact information. If they throw out the letter they might keep the image. Nothing but the image should be on the front.

Step 7. Put it all in the envelope.

Step 8. Lick it, seal it, stamp it.

Step 9. Mail it.

OK, here is the letter. You have my permission to use it or adapt it, copy it into your word processor, personalize it, and print it. My letter below is written as though it’s personalized to the wife, mentioning the husband. You need to adapt to the persons and titles you are sending it to. (Note this could be sent to corporations too).

Why on Earth Am I Sending You a Christmas Letter in July?I Promise It Will Make Perfect Sense in About 20 Seconds

Your Name Here

Dear Jane,

While you’re enjoying this candy cane and remembering last Christmas, I want to give you an idea. Remember how stressful Christmas shopping can be? Sometimes it just robs the joy from the holiday, trying to find the perfect gift.

But I think I’ve found it for you: Me.

Well, not me, exactly. But my artwork.

Wait, before you crumple up this letter, here’s what I was thinking.

You once bought one of my paintings, and I remember that your husband loved it. For this Christmas, I can do a custom painting based on something your husband really loves ... a special place, a special memory, or something meaningful to him. Since he already likes my art and my style, he’ll love a custom painting done just for him.

In fact, I daresay it may be the most memorable Christmas gift he ever receives.

Of course, the reason I’m contacting you in July is so we have time to put our heads together on the subject. I’ll do some sketches till I get it the way you want it, then I’ll begin the painting. And it will be ready for Christmas. (I also do birthdays and anniversaries.)

Here’s the catch.

Yes, there is always a catch. Paintings take a long time to paint and a long time to dry, which is why I’m contacting you in July. Hey, that rhymes. Santa would be proud.

The catch is that I can do only three custom paintings before Christmas. Once I book those three paintings, I probably won’t be able to do more. So if you like the idea, give me a call, tell me the size you’re thinking about, the scene, the colors, and I’ll quote you a price and give you time to think about it without feeling obligated.

Your husband will get the world’s most special Christmas gift, custom-painted for him. I hope you like the idea. And I promise I’ll keep it a secret.

I’ve enclosed a picture of a recent painting to remind you of my artwork. But I can paint anything you want, painted in my own style. Just call the number below and let’s talk turkey … well, Christmas turkey.

Merry Christmas … in July!

Artist Name

Contact information

PS: This is our little secret. I haven’t sent the same thing to your husband. Imagine how his eyes will light up when he sees a painting of something meaningful to him. Maybe his childhood home, the old farm, your favorite vacation spot, his Aunt Nellie. Anything. But if you like the idea, call, because I can do only three custom paintings for this Christmas, if I start soon.

-end letter-

Side Benefits to the Letter

Will this work? Absolutely. And if nothing else, you’ll get talked about, create attention, and get a chance to put a photo of a painting you’re trying to sell in front of a potential buyer. It will be a great image piece because of your creativity, and, yes, you should get a few orders. Be sure to get a deposit and explain terms of deposit so you don't work for free. The deposit will get you some of your money up-front and the rest you'll get when the paintings are done, usually way before Christmas.

Can you do more than three? Probably, but you want to create scarcity and time pressure. Plus, no one wants what everyone can have. This is special.

You’ll need to be ready for the call. Know your prices and sizes and be ready to e-mail the information when they call. Most important, get them talking about what scene they want painted. Get them imagining the excitement. Get them thinking about where it will hang and how the recipient will think of them every time they look at it. It’s an easy sale, and a great way to communicate that you do commissions. (Don’t use the word commissions, though; that’s an unknown insiders’ term to most people.)

Will you have the guts? Some of you will, and I think you’ll see great results. The best results will come from previous buyers, and the more recent, the better the response. Don’t be afraid to send out a few hundred of these. You can always paint more, and not everyone will bite, but I guarantee they’ll be talking about you.

Oh, one more thing. If you mail the exact same letter 2 weeks later you will increase response.